Scottish Widows has has secured a £630m pensioner buy-in with the ICI Pension Fund – the insurer’s largest external bulk annuity transaction to date.
The buy-in, which covers over 4,000 of the fund’s pensioner members, follows several buy-ins completed by the fund since March 2014. It also sees Scottish Widows’ added to the trustee’s insurer panel to be considered for further bulk annuity transactions as it continues its de-risking strategy.
Widows has now completed four pensioner buy-in arrangements, ranging from £50m to £630m, with a total of more than £1.25bn.
LCP lead adviser Clive Wellsteed says: “This £630m buy-in with Scottish Widows is the trustee’s eighth transaction since it introduced buy-ins into its de-risking strategy in 2013. The ICI Fund now has innovative umbrella contracts with strong contractual terms in place with all three insurers on its de-risking panel, allowing the Trustee to react to favourable opportunities and build on the £6.3bn of liabilities insured to date.”
Scottish Widows director of bulk annuities Emma Watkins says: “We are delighted to have been chosen by the trustee of the ICI Pension Fund on this significant buy-in arrangement and look forward to becoming a long term de-risking partner for them. We have worked closely with the Trustee and their advisers to develop a bespoke solution over a number of months and this transaction demonstrates Scottish Widows’ ability to provide innovative de-risking solutions to large pension schemes.”
ICI Pension Fund CEO Heath Mottram says: “This buy-in is the result of significant work by the trustee over the last five months, and further builds on the fund’s strong de-risking foundations.